Handling Unclaimed or Abandoned Wages
Webinar Details $219
- Webinar Length: 100 Minutes
- Guest Speaker: Vicki Lambert
- Topic: Human Resources, Taxation and Accounting, Payroll
- Credit: HRCI 1.5, SHRM 1.5, CPE 2.0, ATAPR 1.5, RCH 1.5
It is every employer’s responsibility to identify which paychecks have remained unclaimed by employees and to turn over these “unclaimed wages” to the appropriate state annually. But most employers are unaware of this requirement and are equally unaware of the penalties, fines and especially interest that can be levied against such employers by the state. This webinar explains when wages are considered abandoned, how to track and submit these checks to the appropriate state and how to perform the required due diligence.
Abandoned wages, abandoned property, escheat…the process may have many names but only one real requirement. All “holders” (aka employers) must report all unclaimed wages to the proper state, at the proper time, in the proper manner using the proper method. No ifs, ands or buts. The trouble is many employers are simply not aware of these requirements. The issue of non-compliance is just a matter of the company not being aware of their reporting responsibilities. But unfortunately, not being aware of the requirement doesn’t stop the huge fines and penalties that befall the company for failing to report unclaimed wages.
Failure to comply with state regulations could now result in audit assessments, significant interest accumulations, and criminal penalties. The ramifications may not even be limited to one state. For instance, organizations with the corporate headquarters in one state and employees in other states could be liable for penalties in all states that they have employees. It all depends on which employee did not claim which paycheck. And given the current economic environment, many states have moved towards unclaimed wages as a source of revenue that can be easily tapped with existing laws and a crackdown on enforcement.
The only way to avoid these huge penalties, fines and interest is for the payroll department to correctly identify all unclaimed wages, and report and remit them each year to the proper authorities.
Areas Covered in the Webinar:
- When are wages considered abandoned?
- What laws or regulations cover unclaimed wages?
- What is payroll’s responsibility relating to abandoned wages?
- What processes to take to correctly report and remit unclaimed wages
- Liability issues—what do you do if you have an outside payroll service
- How to establish proper procedures for tracking unclaimed wages correspondence to comply with due diligence requirements
- How to safeguard unclaimed wages from unauthorized and improper release
- The importance of written procedures
- Steps to surviving an audit
Who will Benefit:
- Payroll Executives/Managers/Administrators/Professionals/Practitioners/Entry Level Personnel
- Human Resources Executives/Managers/Administrators
- Accounting Personnel
- Business Owners/Executive Officers/Operations and Departmental Managers
- Attorneys/Legal Professionals
- Any individual or entity that must deal with the complexities and requirements of Payroll compliance issues
- About Us 00:00:18
- Our Focus For Today 00:01:01
- Section 1: Escheat - Terms & Definitions 00:02:35
- Name It Goes By 00:02:43
- Pronunciation And Definition 00:02:54
- Or….. 00:04:49
- More Definitions 00:05:44
- More Definitions Holder 00:09:04
- How To Long To Hold The Money 00:12:04
- Section 2: Escheat - History & Background 00:13:19
- Why Are The States Involved? 00:13:22
- History And Background 00:17:15
- Uniform Unclaimed Property Act 00:19:36
- Property Covered By The Act 00:22:08
- Derivative Rights 00:22:46
- The States And The Courts 00:24:03
- Private Efforts V State Efforts 00:28:42
- Section 3: Escheat - Researching The Laws 00:30:48
- Why So Important 00:30:56
- State Efforts To Find Owners - Example Iowa 00:32:37
- State Efforts To Collect From Businesses 00:33:27
- The Laws - Each State Has Own Laws On 00:34:48
- Finding Those Laws 00:36:08
- Using Google (Any Search Engine) 00:38:03
- And We Get - Important News for Holders 00:38:33
- And We Get - Contact The Holder Reporting Division 00:38:57
- And We Get - Useful Information for Holders (Businesses) 00:39:26
- NAUPA Website 00:40:12
- And We Get - Nevada State Treasure’s Office 00:41:05
- And We Are On The Same Page Again 00:41:21
- Section 4: Escheat - Holder Reporting 00:42:08
- Holder Reporting Four-Step Process 00:42:12
- When Considered Abandoned 00:43:27
- Abandoned Wages Requirements 00:44:34
- Agent Issued Stale Dated Payroll Checks 00:45:08
- Agent Issued Stale Dated Payroll Checks Continued 00:46:02
- When To Report/Remit: Each State Has Their Own Rules 00:47:15
- States That Differ From Nov 1 00:48:12
- How To Report 00:49:55
- How To Report Continued 00:53:06
- Wage Limit For Reporting 00:55:54
- Aggregate Reporting Limits 00:56:37
- Electronic Filing Requirements 00:57:19
- Negative Reporting Requirements 00:58:34
- Idaho State Treasurer - Unclaimed Property 00:59:14
- Check And Intangible Property Held In Ordinary Course Of Business 00:59:58
- How To Remit 01:00:24
- Section 5: Escheat - Due Diligence 01:01:09
- What Is Due Diligence 01:01:37
- Examples: Due Diligence 01:02:16
- Due Diligence - Example Iowa 01:03:37
- Due Diligence - Example Kentucky 01:04:37
- Due Diligence Requirements By State 01:05:40
- What Does This Notice Need? 01:06:48
- What Does This Notice Need? Continued 01:07:09
- DE Example 01:07:53
- What If The Owner Responds 01:08:47
- Section 6: Escheat - Noncompliance 01:09:24
- What Happens If A Company Doesn’t Comply 01:09:30
- Penalty For Failure To Report Wages 01:10:29
- Penalty For Failure To Report Wages Continued 01:11:14
- Penalty For Failure To Report Wages Continued 01:12:01
- Section 7: Escheat - Payroll Procedures 01:12:07
- How Should Payroll Handle This? 01:12:10
- Steps In Handling Abandoned Wages 01:13:33
- Identify The Checks In Question 01:14;18
- Check-In Question 01:15:42
- Research Each Check 01:17:58
- Researching The Checks 01:19:59
- Due Diligence 01:22:42
- Reissuing Checks 01:23:41
- Terminated Employees And The Rest 01:24:22
- Create A Liability Account 01:25:33
- Sending Out The Letters 01:26:44
- Undeliverable Letter 01:28:36
- No Response 01:30:17
- Employee Responds Back 01:32:01
- File Report And Remit Funds 01:34:26
- Record Retention 01:37:33
- Questions 01:39:33
- Presentation Closing 01:56:41
- Abandoned Property 01:12:01
- Abandoned Wages 01:08:57, 01:13:45, 01:27:38
- Derivative Rights 00:22:46, 00:22:59
- Due Diligence 00:02:20, 01:01:09, 01:06:37, 01:14:04, 01:38:33
- Escheat 00:02:10, 00:02:54
- Form 941-X 01:24:03
- Form W-2 01:27:22
- Form W-2C 01:24:01
- Holder 00:09:45, 01:06:48
- Intangible Property 00:59:52
- Liability 00:09:59, 01:25:34
- Remit Funds 01:05:19
- Revenue 01:09:41
- Stale Check 00:46:30
- Unclaimed Property 00:05:44, 00:07:35
- Wage 00:10:01, 01:00:00, 01:10:29
Abandoned Property: Abandoned property refers to the property to which the owner has relinquished all rights. When property is abandoned, the owner gives up the reasonable expectation of privacy concerning it. The person finding the abandoned property is entitled to keep it.
Abandoned Wages: Abandoned wages are wages that were paid, but never picked up or deposited by the employee.
Derivative Rights: An agreement between between two or more parties which serves as a security whose value is based on price fluctuations of an underlying asset.
Due Diligence: Due diligence is a process or effort to collect and analyze information before making a decision or conducting a transaction so a party is not held legally liable for any loss or damage. The term applies to many situations but most notably to business transactions.
Escheat: The process of turning custody of abandoned assets or accounts over to a state authority
Form 941-X: Adjusted Employer's Quarterly Federal Tax Return or Claim for Refund.
Form W-2: Form W-2 is an Internal Revenue Service tax form used in the United States to report wages paid to employees and the taxes withheld from them. Employers must complete a Form W-2 for each employee to whom they pay a salary, wage, or other compensation as part of the employment relationship. - Wikipedia (https://en.wikipedia.org/)
Form W-2C: W-2C is a form used to make corrections on previously issued wage/tax information (W-2s) from current or prior years. Like Form W-2, it is a multi-use form used to report corrected wages to the IRS (Internal Revenue Service), FTB (Franchise Tax Board), and SSA (Social Security Administration).
Holder: One who is in possession of something, usually the purchaser and owner.
Intangible Property: Intangible property, also known as incorporeal property, describes something which a person or corporation can have ownership of and can transfer ownership to another person or corporation, but has no physical substance, for example brand identity or knowledge/intellectual property. (en.wikipedia.org)
Liability: In financial accounting, a liability is defined as the future sacrifices of economic benefits that the entity is obliged to make to other entities as a result of past transactions or other past events, the settlement of which may result in the transfer or use of assets, provision of services or other yielding of economic benefits in the future.
Remit Funds: To transmit or send (money, a check, etc.) to a person or place, usually in payment. to refrain from inflicting or enforcing, as a punishment, sentence, etc. to refrain from exacting, as a payment or service.
Revenue: In accounting, revenue is the income that a business has from its normal business activities, usually from the sale of goods and services to customers. Revenue is also referred to as sales or turnover. Some companies receive revenue from interest, royalties, or other fees.
Stale Check: An uncashed check that’s more than six months old.
Unclaimed Property: Unclaimed property (sometimes referred to as abandoned) refers to accounts in financial institutions and companies that have had no activity generated or contact with the owner for one year or a longer period. Common forms of unclaimed property include savings or checking accounts, stocks, uncashed dividends or payroll checks, refunds, traveler's checks, trust distributions, unredeemed money orders or gift certificates (in some states), insurance payments or refunds and life insurance policies, annuities, certificates of deposit, customer overpayments, utility security deposits, mineral royalty payments, and contents of safe deposit boxes.
Wage: A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to a manual or unskilled worker.